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Governor-elect asks agencies to make cuts

In a letter, Hassan told department heads to submit fiscal 2014 budgets that spend 97 percent of their current appropriation, and fiscal 2015 budgets with the same spending as this fiscal year.

She asked agencies to meet the targets for all general, liquor, sweepstakes, highway, turnpike and fish and game funds.

"While we are beginning to see signs of recovery and revenue growth, we face fiscal uncertainty, particularly around how decisions in Washington and the so-called fiscal cliff will impact New Hampshire's state budget, economic growth and revenues," Hassan said in the memo. "There are also investments that we must make as a state in the coming two years in order to protect the health and safety of our citizens and to build an innovative economy that will ensure long-term growth. These budget targets will give us options and flexibility to assess and respond to unfolding economic and external events."

During the campaign, Hassan said she would like to restore some of the money cut from higher education by the previous legislature as well some money for the state's largest hospitals for care they provide to the state's poorest residents.

She told agencies the reduced budgets should not violate maintenance of effort requirements or federal laws or regulations and should focus on identifying reductions through innovation and efficiencies, not across-the-board cuts.

"I recognize that many state agencies have faced significant cuts in recent years and reaching these targets will be challenging," said Hassan.

Overall, state agencies and institutions have asked for an additional $691 million in spending to be funded by state tax dollars for the next two fiscal years, a 26 percent increase.

The total request - including federal and other funds - is an additional $11.9 billion in spending or 19 percent.

The hearings are the first of many steps before the state's two-year operating budget is finalized in June.